The world of finance is often a world filled with complex mathematical constructs and confusing acronyms. There are many people who know and understand how to calculate compound interest, the difference between net income, gross income, adjusted gross income, marginal tax rates, the future value of assets, IRA, 401K, money markets, certificates of deposit, bonds, positions, rate of return, average annual return, dividends, loading, short sells, etc. Many of these people are employed in the financial services industry as brokers, advisors, etc.
There are many more people who do not have a good understanding of the concepts of finance. These people often have good jobs, a good life and are working to be able to, some day, comfortably retire. Often, these people have specialties, but those specialties are not similar to the financial industry. Engineers, teachers, truck drivers, sales clerks, marketing people, etc., often have income, assets and investments but, generally have only a limited knowledge of the concepts of finance and the theories, mathematics and acronyms of the financial industry. To many of these people, the rules, concepts and jargon of finance are like a foreign language—they may have a rudimentary understanding of the language, but they don't have sufficient knowledge or experience to effectively apply the concepts and are forced to learn through trial and error, which is not a good idea when their assets and future are at stake.
On the other hand, many people who have income, assets and investments often have a passion, interest or general knowledge about another common system. For example, many such individuals enjoy sports such as football, baseball, soccer, basketball, etc. Engineers, teachers, truck drivers, sales clerks, marketing people, etc., often enjoy watching sports programs and following their favorite teams. Some have a general knowledge of the rules and jargon of one or more sports, while others have more detailed knowledge, even down to a quarterback's “QB rating,” a pitcher's “earned run average,” or a baseball player's “batting average.” These people understand terms such as OBP, 4th and goal, off sides, false start, screen pass, header, corner kick, double play, ERA, etc.
Many play these sports as part of a recreational league. For some, instead of playing the sport, they participate in “fantasy” leagues. For example, fantasy football allows individuals to create fictional teams of football players drawn from the players in the National Football League (NFL). The fictional teams then compete within the context of the fantasy football league. Individuals that are familiar with the fantasy football system are comfortable participating in drafts, making trades, and organizing a team in the fashion they believe will best allow them to compete against other teams. They are likely to be very comfortable in football parlance, and can give and receive information in that format. However, often these individuals are not necessarily versant in the world of finance. For these individuals, the relationship of time, money, and risk may not be as clear to them as a lateral pass or organizing a defensive line. They understand the difference between a spread formation and a shot-gun formation more than they understand the difference between common financial instruments (e.g., stocks, bonds, loans, interest rate swaps, futures, etc.).
What is needed is a financial method that analogizes financial information into similar constructs and places them in a scenario the user is more likely to understand because it relates to a system known by the user (i.e., football).
Once the analogy has been established between the known system and the concepts of finance, the user is afforded the ability to better understand the concepts of finance because the user has been previously related to the analogous system. This enhanced understanding of the concepts of finance through the analogous system enables the user to make better decisions in managing their personal finances and their securities portfolio.